The progressive issue many progressives don't seem to like [View all]

[cthulu2016]

There is a spectrum of liberal/progressive concerns—a liberal/progressive approach to political representation, to foreign policy, to domestic policy priorities, to tax policy... in every arena there there is a progressive camp with a progressive view that (whether right or wrong) enjoys strong majority support on DU.

With one exception... the issue that matters the most. The Macro-Economy... what it is up to at its core during this crisis and how it can be repaired.

There are some posters on DU who adhere to the progressive/liberal/Basic-Keynesian view of our current economic crisis, of course, but it doesn't seem to be a majority or even plurality view.

All liberal/progressive economists agree that:

1) There is no inflation worth talking about. (Specific price increases in medicine, milk, energy and higher education are not inflation. Inflation is a broad, universal element of an economy and in our current economy it just doesn't exist.)

2) The economy cannot be stimulated because a) Republicans running Congress are assholes (of course), and b) Fed rates are at zero and we have no inflation.

The republicans prevent any fiscal policy help so we are left with monetary policy... the Fed. Given current economic conditions the Federal reserve would cut interest rates an additional 3-5%, which is a big move, but that is impossible because they are already at zero. (If the current Fed rate was 5% Bernanke would cut it to 1%. But at 0% it cannot be cut to -4%)

[font color=green]Real interest rates = (Nominal Interest Rate - Inflation)[/font color]

When nominal interest rate is zero then the only way rates can be lower (in effect) is for inflation to be higher. The only way the Fed can gain the economic traction of cutting interest rates another 3-5% is to have inflation increase 3-5% without raising the Fed rate.

There is no way this economy can truly recover without inflation. It's basic economics and, since the facts have a left-wing bias, it's the view of the economic left. (The view of the economic right has nothing to do with facts. The RW wants inflation low for the reason they have always wanted inflation low—it hurts workers and retirees while helping only the super wealthy.)